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The price of Ethereum has fallen about 1.3% in the last 24 hours and about 10% in the past week. This is no longer just short-term fluctuations. On the daily chart, the price of ETH has already broken below the major rock, creating a bearish structure warning of a possible decline of 20% if the support fails.
At the same time, a new variable entered the picture. Capital appears to be shifting from Bitcoin to Ethereum, helping to ignite a short-lived recovery. Whether this rotation can turn this breakout into a bear trap now depends on who is actually buying, who is selling forcefully, and what price levels remain afterward.
The collapse of Ethereum triggered it, but the switch between Bitcoin and ETH sparked a rebound
Ethereum consists A large flat structure on the daily paper from the end of November. This pattern usually indicates a bearish reversal once the ETH price breaks below the neckline, which acts as a final support that keeps the structure intact.
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This collapse occurred on January 25, when Ethereum fell below the $2,880 threshold and briefly fell towards the $2,780 area. Based on the increase in the model, this breakdown provides a disadvantage of just over 20% if the selling pressure accelerates.
However, the move was not extended immediately. After establishing the bottom, Ethereum recovered by about 4-5%.
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This rebound coincided with an apparent shift from Bitcoin to Ethereum, highlighted by large on-chain exchanges as Bitcoin exposure was reduced in favor of ETH.
This rotation often appears near local lows. Traders change the capital in the assets that they have already corrected, betting on a mean reversion. But the rotation alone does not determine the direction of the trend. To understand if it is a real support or just a pause, we need to see who is involved.
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The whales sell the rebound, but the long-term holders enter
The whales’ behavior helps explain why the rebound lacked a strong following. The whales, who are known here as great carriers except in exchanges, used the bounce to slightly reduce the exposure instead of increasing it.
Since the beginning of the recovery, it has decreased Ethereum supply held by whales From about 100.24 million ETH to about 100.20 million ETH. This is not an aggressive sell, but it shows that the whales did not treat the rebound as a strong accumulation zone. Instead, they appear cautious, using force to minimize risks.
This raises an important question. If the whales did not lead the recovery, why did the price not change again?
The answer comes from those with long-term funding. The 6- to 12-month holding group, which represents investors with stronger conviction and less sensitivity to short-term price fluctuations, is continuously increasing its share. Since January 23, this group has grown from about 17.23% of the supply to about 18.26%.
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In simple terms, Hotan sells high profits (ETH) rebounds, But long-term holders buy dips. This change in supply explains why Ethereum stabilized after the crash rather than immediately. It also paves the way for the next layer of risk: the positioning of derivatives.
A sell-off raises the risks of bear traps as Ethereum price tests key levels
The derived data shows why the market is now so sensitive to price changes. Liquidation leverage measures the amount of forced buying or selling if the price of ETH moves to certain levels.
In Binance’s perpetual market for the ETH-USDT system, the cumulative short liquidation exposure over the next seven days is approximately $1.69 billion. Long-term liquidation exposure is close to $700 million. This means that short selling exceeds buying by more than 100%.
When a large number of traders see the opportunity to go down after a crash, even a small rise in price can force sellers to close short positions to buy ETH, pushing the price of ETH higher due to a “short squeeze”.
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Key levels now determine whether it will become a bear trap or a continuation of the downtrend.
If the price of Ethereum moves above $3,020, it will begin to liquidate a significant portion of short positions, potentially forcing more than $700 million in short coverage. Above this, $3,170 and $3,270 become the next pressure zones. Break above $3,270 will remove all current short side pressure.
For the bearish structure to weaken significantly, Ethereum would have to recover $3,410, which represents the highest value on the right shoulder.
On the other hand, the risk is always clear. A clean loss of $2,780 would confirm a breakout of the neckline and reopen the path to a full 20% breakout target near $2,300 ($2,290 to be precise).
Ethereum is now stuck Between structure and position. The graph warns of a 20% collapse, and the whales do not intervene aggressively. At the same time, the longs piled up, and the shorts became too crowded.
If the shift away from Bitcoin continues and the price rises above $3,020, the market could quickly turn around as forced buying takes over. If this fails and the support at $2,780 is broken again, the bearish forecast remains fully active.
